Homeowners

Question 1

Open peril

Answer 1

Wide coverage=many exclusions

Question 2

Named peril

Answer 2

Narrow coverage= many exclusions

Question 3

Homeowners forms do not cover these circumstances at all (9):

Answer 3

• Ordinance law
• Earth movement
• Water damage
• Off premises power failure
• Neglect
• War
• Nuclear hazard
• Intentional acts
• Mechanical breakdown

Question 4

Section 1 conditions (18):

Answer 4

• interest
• deductible
• duties
• concealment
• loss settlement
• pair or set
• appraisal
• other insurance
• suit against us
• our option
• loss payment
• abandonment
• mortgage
• no benefit to bailee
• nuclear hazard
• recovered property
• volcano
• policy period

Question 5

Section 2 conditions (10):

Answer 5

• limit of liability
• severability
• duties after “occurrence”
• Duties of an injured person
• claim payment
• suit against us
• bankruptcy
• other insurance
• policy period
• concealment or fraud

Question 6

Conditions that apply to both section 1 and 2 (7):

Answer 6

• subrogation
• cancellation
• nonrenewal
• liberalization
• waiver or change
• assignment
• death

Question 7

Loss settlement condition

Answer 7

Personal property covered at ACV:

• ACV subtracts depreciation from cost of new item
• Age and condition (wear and tear) of time are factors of its depreciation

If residence and other structures are covered for RC:

• Replacement is of like, kind, quality of original structure
• Insured must show what has already been spent on repair, if any.

Question 8

Insurance to Value requirement and formula

Answer 8

If home is insured at 80% of value or more:
-replacement cost

If home is insured at less than 80%:
-Policy pays the higher of ACV, replacement cost minus the insurance to value requirement (similar calculation to a coinsurance penalty): Insurance limit divided by 80% property value then multiply by covered damage.

Question 9

HO Section 1: Property coverage review:

Answer 9

Coverage A: dwelling, attached structures, materials located near it.
Coverage B: Other detached structures
Coverage C: Personal Property (contents)
Coverage D (loss of use)
Additional coverages- can be added to policy

Question 10

Section 2: Liability coverage

Answer 10

Pays damages to someone who suffers loss caused by the insured.